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on Evolutionary Economics |
| By: | James Tremewan; Chloé Le Coq; Alexander D. Wagner |
| Abstract: | Using a group identity manipulation we examine the role of social preferences in an experimental one-shot centipede game. Contrary to what social preference theory would predict, we fnd that players continue longer when playing with outgroup members. The explanation we provide for this result rests on two observations: (i) players should only stop if they are suffciently conident that their partner will stop at the next node, given the exponentially-increasing payoffs in the game, and (ii) players are more likely to have this degree of certainty if they are matched with someone from the same group, whom they view as similar to themselves and thus predictable. We find strong statistical support for this argument. We conclude that group identity not only impacts a player's utility function, as identifed in earlier research, but also affects her reasoning about her partner's behavior. |
| JEL: | C72 C91 C92 D83 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:1305&r=evo |
| By: | Meub, Lukas; Proeger, Till; Hüning, Hendrik |
| Abstract: | This paper experimentally investigates social learning in a two-agent prediction game with both exogenous and endogenous ordering of decisions and a continuous action space. Given that individuals regularly fail to apply rational timing, we refrain from implementing optimal timing of decisions conditional on signal strength. This always renders it optimal to outwait the other player regardless of private signals and induces a gamble on the optimal timing and action. In this setting, we compare exogenous and endogenous ordering in terms of informational efficiency, strategic delay and social welfare. We find that more efficient observational learning leads to more accurate predictions in the endogenous treatments and increases informational efficiency compared to the benchmark exogenous treatment. Overall, subjects act sensitively to waiting costs, with higher costs fostering earlier decisions that reduce informational efficiency. For a simple implementation of waiting costs, subjects more successfully internalize information externalities by adjusting their timing according to signal strength. Simultaneous decisions in endogenous ordering avoid observational learning and compensate the higher degree of rational decisions. Overall, endogenous timing has no net effect on social welfare, as gains in accuracy are fully compensated by waiting costs. Our results hold relevance for social learning environments characterized by a continuous action space and the endogenous timing of decisions. -- |
| Keywords: | Endogenous Timing,Information Externalities,Laboratory Experiment,Social Learning,Strategic Delay |
| JEL: | C91 D82 D83 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:167&r=evo |
| By: | Meub, Lukas; Proeger, Till; Bizer, Kilian |
| Abstract: | Behavioral biases in forecasting, particularly the lack of adjustment from current values and the overall clustering of forecasts, are increasingly explained as resulting from the anchoring heuristic. Nonetheless, the classical anchoring experiments presented in support of this interpretation lack external validity for economic domains, particularly monetary incentives, feedback for learning effects and a rational strategy of unbiased predictions. We introduce an experimental design that implements central aspects of forecasting to close the gap between empirical studies on forecasting quality and the laboratory evidence for anchoring effects. Comprising more than 5,000 individual forecasts by 455 participants, our study shows significant anchoring effects. Without monetary incentives, the share of rational predictions drops from 42% to 15% in the anchor's presence. Monetary incentives reduce the average bias to one-third of its original value. Additionally, the average anchor bias is doubled when task complexity is increased, and is quadrupled when the underlying risk is increased. The variance of forecasts is significantly reduced by the anchor once risk or cognitive load is increased. Subjects with higher cognitive abilities are on average less biased toward the anchor when task complexity is high. The anchoring bias in our repeated game is not influenced by learning effects, although feedback is provided. Our results support the assumption that biased forecasts and their specific variance can be ascribed to anchoring effects. -- |
| Keywords: | anchoring,cognitive ability,forecasting,heuristics and biases,incentives,laboratory experiment |
| JEL: | C90 D03 D80 G17 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:166&r=evo |
| By: | Maria Sironi; Nicola Barban; Roberto Impiacciatore |
| Abstract: | Compared to older cohorts, young adults in developed societies delay their transition to adulthood. Yet within cohorts, variations in timing and sequencing of events still remain. A major determinant of life course events is social class. This characteristic can influence the sequence of events in terms of socioeconomic inequalities through a different availability of opportunities for social mobility. Several studies show that in North America, a higher familial status tends to decrease the complexity of trajectories, while the opposite effect has been found in Southern Europe. This research examines the sequence of transitions, highlighting in a comparative perspective how life trajectories are influenced by parental social class in the United States and Italy. The main result of the analysis is that the effect of parental background is different across countries. In the United States, we find that a high status favors not only a higher education and an early entry in the labor market, but also a higher heterogeneity of states and the occurrence of new behaviors like single living and cohabitation. In Italy, the effect of social class is gender-specific. Among men, a higher social class tends to delay transitions more than lead towards modern behaviors. Among women, a higher social class either tends to facilitate the experience of a more modern and independent transition, or it generates a higher probability of postponing exit from the parental home, and then family formation, among those who completed their education and found a job. |
| Keywords: | transition to adulthood, social class, parental background, sequence analysis |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:don:donwpa:059&r=evo |
| By: | Boris Gershman |
| Abstract: | The evil eye belief is a widespread superstition according to which envious people can cause harm by a mere glance at coveted objects or their owners. This paper argues that such belief originated and persisted as a useful heuristic under conditions in which destructive envy represents a real threat and envy-avoidance behavior, e ffectively prescribed by the evil eye belief, is a proper response to this threat. Historically, increasing wealth di fferentiation raised the risk of envy-induced destructive behavior leading to the emergence and spread of the evil eye belief. Evidence from small-scale preindustrial societies shows that there is indeed a robust positive association between the incidence of the belief and measures of wealth inequality, controlling for continental fixed eff ects and potential confounding factors such as patterns of spatial and cross-cultural diffusion and various dimensions of early economic development. Furthermore, the evil eye belief is more likely to be present in agro-pastoral societies that tend to sustain higher levels of inequality and where vulnerable material wealth plays a dominant role in the subsistence economy. |
| Keywords: | Evil eye belief, Envy, Inequality, Culture, Superstition |
| JEL: | D31 D74 N30 O10 Z10 Z13 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2013-14&r=evo |